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3 Graphs Explain How We Are Not in a Housing Bubble

3 Graphs Showing Why This is Not a Housing Bubble

A recent survey conducted by the National Association of Realtors shows that many consumers believe we’re in a housing bubble. This feeling is understandable, as year-over-year home price appreciation has been in the double digits. Today’s market, however, is not like the housing crash of 2007. Here are 4 key points why today’s market is much different than the one 15 years ago.

  1. Houses are not unaffordable like they were during the Housing Boom

“The affordability formula has three components: the price of the home, wages earned by the purchaser, and the mortgage rate available at the time. Conventional lending standards say a purchaser should not spend more than 28% of their gross income on their mortgage payment.” In 2007 prices were high, wages were low, and mortgage rates were over 6%. In today’s market, prices are high but wages have increased and the mortgage rate is still well below 6%. This means the average purchaser pays less of their monthly income towards their mortgage payment than they did back in 2007.

2. Mortgage standards were much more relaxed during the boom

“During the housing bubble, it was much easier to get a mortgage than it is today. As an example, let’s review the number of mortgages granted to purchasers with credit scores under 620. According to, a credit score between 550-619 is considered poor. In defining those with a score below 620, they explain: “Credit agencies consider consumers with credit delinquencies, account rejections, and little credit history as subprime borrowers due to their high credit risk. Buyers can still qualify for a mortgage with a credit score that low, but they’re considered riskier borrowers. Here’s a graph showing the mortgage volume issued to purchasers with a credit score less than 620 during the housing boom, and the subsequent volume in the 14 years since.”

3. We don’t have a surplus of homes on the market – we have a shortage

In 2007, there were more homes for sale (many of which were short sales & foreclosures) this surplus of homes caused prices to tumble. In today’s market, there is a shortage of inventory which is causing housing prices to increase. Inventory is nothing like the last time. Prices are rising because there’s a healthy demand for homeownership.


How Much House Can I Afford?,

Crew, KCM. “4 Simple Graphs Showing Why This Is Not a Housing Bubble.” Keeping Current Matters, KCM Crew Https://, 16 Feb. 2022,

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